2015 (2) TMI 1399

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....CIT(A)] dated 10.05.2013 and the same are taken together for disposal by this common order. First we take up the assessee's appeal i.e. ITA No.5400/M/2013. ITA No.5400/M/2013 2. The sole issue agitated by the assessee through its grounds of appeal is relating to disallowance under section 40a(ia) of the Income Tax Act on account of payments made to hospitals without deduction of TDS in violation of provisions of section 194J of the Act. 3. The Assessing Officer (hereinafter referred to as the AO) had made addition of Rs.85,05,05,515/- invoking provisions of section 40(a)(ia) for non-deduction of TDS as per the provisions of section 194J. 4. In appeal, the Ld. CIT(A) restricted the addition to Rs.10,65,669/- and deleted the remai....

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.... under section 201 and 201(1A) and the disallowance under section 40(a)(ia) cannot be automatic when the assessee has not claimed this payment as expenditure against the income. The assessee has shown the income, only the service charges receivable from insurance companies for rendering services as 3rd party administrator and not having any margin or profit element in the payment received from the insurers for the purpose of remitting to the hospitals to settle medical claim of the insured. Therefore, when the said payment has not been claimed as expenditure incurred for earning the income by the assessee then the provisions of section 40(a)(ia) is not attracted for non deduction of tax at source in respect of the said payment. Following th....